Pointers for Buyers of Other Types of Properties
1. Property Tax Liabilities
2. Notify Change of Ownership
3. Property Tax Assessment
4. Payment Arrangement
5. File Property Tax Claims
6. Other Taxes on Property
1. Property Tax Liabilities
Once IRAS is notified of the property transfer, all property tax related correspondence including property tax bills will be sent to you as the new owner. As the property owner, you will be liable for all property tax on the property. Hence it is important that you, through your lawyer, enquire if there are any outstanding or future property tax liabilities, and make provisions for the seller to reimburse you for the property tax amount that is to be borne by him.
Enquire on outstanding property tax liability
Property Tax is payable in advance by 31 January every year. If you are buying the property after January, the seller ought to have paid all property taxes from previous years as well as the current year. Before you buy we advise you to check if there is any outstanding property tax on the property as you may be subsequently billed for any outstanding property tax that has not been paid by the previous owner/s. We encourage you to arrange for payment by GIRO for your tax obligations.
Enquire on possible future property tax liability
If you are buying a property that is under construction or newly completed and hence not assessed for property tax yet, you may be billed for the property tax that starts from the TOP date. This is usually within one year of TOP date for residential properties. Your lawyer would usually assist you in seeking any reimbursement of property tax from the seller/developer if the property is transferred to you after the TOP date.
Apportion property tax liabilities
The apportionment of property tax liabilities is a private arrangement between the seller and buyer. Your lawyer would normally make a legal requisition to check on the outstanding property tax, and make provisions to settle the outstanding amount with the seller. IRAS does not apportion nor arbitrate property tax liabilities between the parties. All bills and notices after the transfer of the property will be sent to you as the new owner.
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2. Notify Change of Ownership
You may wish to remind your lawyer to ensure that the seller/transferor’s lawyer has filed a Notice of Transfer to notify IRAS within one month of the property transfer. IRAS will update the ownership record for property tax purpose based on the information given.
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3. Property Tax Assessment
Property Tax is a tax on the property, and is payable by the owner whether or not the property is owner-occupied, rented out or vacant. It is unlike income tax which is levied only when owners derive rental income from properties.
How is Property Tax calculated?
Property tax is calculated based on a percentage (Tax rate) of the Annual Value (AV) of your property. The current tax rate is 10% per year regardless of whether the property is let, vacant or for own use.
Example : AV of property is $54,000
| Property Tax payable is: |
$54,000 X 10% |
= $5,400 |
| Tax payable in 2011: |
= $5,400 |
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4. Payment Arrangement
We encourage you to pay your Property Tax by GIRO as you will enjoy up to 12 interest-free monthly instalments. Alternatively, you may check out other available modes of payment.
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5. File Property Tax Claims
If your property has been vacant for more than 30 days or a calendar month despite attempts to rent it out, you may apply for a refund of tax for the vacant period.
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6. Other Taxes on Property
Rent received from the letting of property in Singapore is subject to income tax. Find out more on Rent & Net Annual Value (NAV). More information for corporate owners.
You are required to pay GST on your purchase of non-residential properties if the seller is GST-registered. Find out more on GST chargeability and GST input tax claims on properties.
When you buy any property, you need to pay Stamp Duty within 14 days of the date of Contract/Agreement. In most instances, your lawyer acting for you in the property purchase will arrange for payment of Stamp Duty.
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FAQs
For HDB flat owners, HDB will inform IRAS on the change of ownership, thus you do not have to inform IRAS separately.
For other property owners, when any property is sold or transferred, the seller or transferor shall, within one month after the sale or transfer, give notice of the sale or transfer to IRAS.
Generally, the lawyers acting on behalf of the seller/transferor will submit the Notice of Transfer via e-Notice of Transfer to IRAS.